All posts tagged Equity Strategiests

Like a winter that never quite arrived (at least for those of us on the eastern seaboard), Wall Street equity strategists came into the new year bracing for a blow that — so far — has yet to land.

Last week, we put the spotlight on Jonathan Golub, the U.S. stock strategist at UBS who on Thursday amped up his call for the S&P 500′s year-end finish to 1475, from an initial call of 1325.

Now, we’ve got Savita Subramanian, the relatively newly-minted stock strategist at Bank of America-Merrill Lynch, who kicked off 2012 with a prediction of 1350 for the end of 2012. At the time, she called for, among other things, “a big drop in growth rates” for S&P 500 company earnings. Now, with a nice January and February in the books — the best for the S&P 500 since 1991 — Ms. Subramanian too is taking a sunnier view on the stock market. She’s raising her year-end estimate today to 1400.

(For the complete table of year-end strategist predictions as of the start of the year, take a peek here, where you’ll note that Mr. Golub and Ms. Subramanian’s initial calls for 1325 and 1350 are almost spot on the Wall Street average.)

To be sure, upgrading her call at this point for a year-end finish of 1400 leaves less than 3% of upside from where we sit today, so it’s hard to argue that she’s turned bullish, as opposed to merely reflecting the past two months’ powerful move higher.

Fresh month, fresh outlook. After a January-February two-fer that saw the S&P 500 gain 4.4% in January, and add another 4.1% in February (back-to-back lead-off home runs, said S&P Indices’ Howard Silverblatt), it was only a matter of time before we saw a response from Wall Street’s gloomy prognosticators. And in Jonathan Golub, chief U.S. equity strategist at UBS, we have our first taker.

Coming into the new year, Mr. Golub had called for a modest 5.4% year-end gain on the S&P 500, to 1325. His forecast at the time called for persistent volatility, a European recession, bond market strains and failed leadership in the E.U.

But with the index now perched around 1375, that dour outlook was bound to change. In a note to clients this morning, Mr. Golub is taking a rosier view on the world, calling now for the S&P 500 to finish the year at 1475, for a 17% yearly gain. Given the strong gains we’ve already enjoyed this year, that gives us another 7% or so of upside to enjoy between now and Dec. 31.

(For those keeping track at home, yes, Mr. Golub’s refreshed call puts him in rarefied air; 1475 is above J.P. Morgan’s bullishly-inclined Thomas Lee, who is calling for 1430, and within a hair’s breadth of Deutsche Bank’s recently-promoted Binky Chadha, who sees 1500 by year-end. See all the beginning-of-the-year calls here.)

In his note this morning, Mr. Golub acknowledges that his bearishness may have been a bit overdone. His expectation that U.S. corporate earnings would stall, he says, may have been too pessimistic, given a new raft of positive drivers: U.S. economic data is improving, Europe appears to have avoided its day of reckoning and financial sector stress has come down markedly.

“Are you totally bullish? Wow, I’m totally bullish too! We should work together!”

Just in time for Valentine’s Day, that’s just how we at MarketBeat are imagining the conversation that led to Deutsche Bank’s hiring of former Bank of America Merrill Lynch mega-bull stock strategist David Bianco to be Deutsche’s U.S. equity strategist.

Bianco’s hiring, reported by Bloomberg, is to fill the shoes of Deutsche Bank’s mega-bull stock strategist Binky Chadha, who is rising up the totem pole to be the firm’s chief global strategist.

About MarketBeat

MarketBeat looks under the hood of Wall Street each day, finding market-moving news, analyzing trends and highlighting noteworthy commentary from the best blogs and research. MarketBeat is updated frequently throughout the day, helping investors stay on top of what’s happening in the markets. Lead writers Paul Vigna and Steven Russolillo spearhead the MarketBeat team, with contributions from other Journal reporters and editors. Have a comment? Write to paul.vigna@wsj.com or steven.russolillo@wsj.com.